In the 1970s and 80s, Malaysia saw some of the most comprehensive affirmative action laws worldwide. Did success for the majority Malays come at the expense of other ethnic groups?
For 20 years in the 1970s and 80s, Malaysia saw some of the most comprehensive affirmative action laws in the world. Directed toward the majority Malays – who had suffered economically – the laws succeeded in improving their lot. But did this success come at the expense of some other ethnic groups? Today the legacy of those laws is still felt – sometimes with bitterness.
When Prime Minister Mahathir Mohamad hands over power in October to his successor, deputy premier Abdullah Badawi, he will leave behind a legacy of peace among Malaysia's ethnic communities – a major gain of his 22-year rule.
But how exactly he achieved this and whether the peace is durable remain areas of speculation, for public debate on key ethnic issues is frowned upon in Malaysia.
Malays form the largest proportion of the largest ethnic group in Malaysia – the Bumiputra (Sanskrit for 'son of the soil'). Bumiputras make up 61 per cent of the 24 million population, while the Chinese account for 25 per cent and Indians (mainly Tamils) 7 per cent.
Some experts now say the main reason for ethnic calm is the policy of affirmative action towards Malays, which helped reduce income disparities. In a recent study, Prof. Frances Stewart of Oxford University examined the links between violence and "horizontal inequalities" – social, political and economic differences between cultural or ethnic groups.
She says affirmative action policies have reduced the potential for inter-ethnic violence by reducing these horizontal inequalities. "The political success of the policies was indicated by the fact that during the economic crisis of 1997, when there were assaults on the Chinese in Indonesia, there were no such attacks in Malaysia; the only mild incidents involved Bumiputra-Indian conflict," says Stewart.
The backbone of Malaysia's pro-Bumiputra policies is the New Economic Policy (NEP), introduced in the aftermath of Chinese-Malay riots that broke out following the racially charged 1969 general election. That election saw the economically dominant Chinese making electoral gains – to the alarm of the ruling Malay-led alliance.
The NEP aimed to reduce poverty and restructure society so no occupation would be associated with a particular ethnic group (the Chinese and foreign interests controlled commerce, many Malays worked as fishermen and rural farmers while large numbers of Indians worked as plantation labourers). The 20-year policy expired in 1990, but some provisions favouring Bumiputras still exist.
Because of the NEP Bumiputras benefited from university quotas, state scholarships, preferential treatment in the civil service and special provisions in business. Corporations were required to employ a percentage of Bumiputras and government contracts were more likely to be awarded to Bumiputra bidders. Bumiputras dominated the public sector. Even now, newly listed companies must be 30 per cent owned by Bumiputras.
Before the NEP, almost every sizeable Malaysian company was under ethnic Chinese ownership or management. Now many corporate leaders are Bumiputras, and Bumiputras own 23 per cent of corporate shares (compared with 2.3 per cent in 1970).
"It (the NEP) improved the life chances of the Malays and contributed in large measure to improving stability in terms of ethnic relations," agrees Toh Kin Woon, a Penang state government official in charge of economic planning. As for the others, a growing economy saw Chinese corporate ownership increase from 27 per cent in 1970 to 41 per cent by the mid-1990s.
"Nowadays, many Chinese just aren't bothered [about affirmative action]," says Ong Eu Soon, a software developer in the capital Kuala Lumpur.
Many, like Ong, turn to the private sector for jobs or start their own businesses.
But while the Chinese dominate business and Bumiputras the public sector, Indians have found it hard to keep up – Indian corporate ownership in Malaysia has increased from 1.1 per cent in 1970 to a paltry 1.5 per cent in 1995.
Among the Indians are unemployed rubber plantation workers who lost their jobs when the plantations were replaced with less labour-intensive oil palms. Although, at 112,000 a small proportion of Indians, they are part of a struggling underclass in Malaysia today, along with other groups such as the Orang Asli indigenous communities.
In April, plantation workers were offered a guaranteed monthly wage of $92. Activists angrily rejected the offer, pointing out that it compared poorly even with the current poverty line for a household, which is about $134 (or just over 500 Ringgit) a month.
"If there is an absence of violence, it is also because of repressive laws that suppress any ill-feelings between ethnic groups," says Mustafa Kamal Anuar, who teaches media studies in Penang.
The Internal Security Act, for example, allows indefinite detention without trial. And questioning the 'special position' of Malays – guaranteed by the constitution in recognition of their weaker economic position – is an offence under the Sedition Act.
Ironically, one of the biggest threats to affirmative action comes from an economic trend over which Malaysia, as a major trading nation, has little control – globalisation.
Critics across the political spectrum say affirmative action has fostered dependency and lack of motivation. With 50,000 mainly Bumiputra graduates unemployed, there is concern that many Malaysians are falling short of the requirements of global firms.
"Globalisation is around the corner," said a Bumiputra contractor. "Bumiputras won't be ready and they will face big problems competing in the global marketplace."
Johan Saravanamuttu, a political science professor working at the Science University of Malaysia, observes that since the end of affirmative action in state-run universities in 2001, Bumiputra enrolment on some courses has dropped from 55 per cent to below 30 per cent.
There are other, wider implications. The ruling United Malays National Organisation (UMNO) is often accused of developing close links with a coterie of newly-emerged Malay billionaires, promoting the system of so-called 'crony capitalism'. By the mid-1990s, when inequalities within the Malays had widened, this led to a popular clamour for reformasi – wide-ranging political reforms to curb abuse of power.
"Affirmative action has led to the enrichment of a small percentage of Bumiputras," says Saravanamuttu. By the same token a new underclass across all the ethnic groups has emerged, comprising plantation workers, fisher folk, urban squatters, and tribal communities.
"It would strike me that an affirmative policy based on needs – aimed at levelling differences irrespective of ethnic identity – would be a better strategy to reduce tendencies towards violence," says Saravanamuttu.
Anil Netto is a Malaysian journalist who works with the social reform group, Aliran.